Solyndra Gave Accurate Description, Restructuring Officer Says

By Michael Bathon -
Mar 28, 2012

Solyndra LLC (SOLY), the solar-panel maker
that received a $535 million U.S. Department of Energy loan
guarantee, conveyed accurate information about its finances to
the government before the company failed, its chief
restructuring officer said in a report.

R. Todd Neilson, a forensic accountant and former FBI
special agent, found that the company submitted proper
documentation to the Department of Energy and kept officials
apprised of its financial health, according to the report filed
yesterday in U.S. Bankruptcy Court in Wilmington, Delaware.

“The DOE had sufficient information to understand the
risks” associated with the guarantee and “make an informed
decision as to the ongoing financial condition of Solyndra,”
said Neilson, a director at Berkeley Research Group LLC.

Neilson made no findings in the 205-page report regarding a
grand jury criminal investigation being conducted by the U.S.
Attorney’s Office in San Francisco and the Justice Department.
Solyndra, based in Fremont, California, sought Chapter 11
protection Sept. 6. Two days later, its offices were raided by
the U.S. Federal Bureau of Investigation.

Neilson said the loan application process took 2 1/2 years,
beginning in December 2006 during the Bush administration. The
Energy Department made Solyndra the first recipient of the loan-
guarantee program in September 2009 under the Obama
administration.

Solyndra submitted “materially correct” financial data to
the department and “all funds drawn under the DOE loan
guarantee were spent in accordance with the relevant loan
documents,” Neilson said.

Chinese Competition

Solyndra’s collapse was spurred by competition from
manufacturers in China, where government subsidies drove down
the cost of polysilicon used in rival solar technologies that
comprise 80 percent of the market, Neilson said.

“Panel manufacturers using polysilicon were able to reduce
the cost and price of their panels substantially,” Neilson
said. “Unfortunately Solyndra’s total costs of production,
including materials, did not experience a commensurate
reduction, which was devastating.”

For Solyndra to survive, the average sale price per watt,
or ASP, would have needed to remain the same as when it entered
the market, or about $3.30, Neilson said. Instead, the price
plunged to $1, he said.

Europe Recession

The recession in Europe, one of the solar industry’s
biggest markets, further slowed sales, he said. The company
generated sales that were less than half of the amount it had
forecast, while manufacturing and operating costs were about
twice as much as originally estimated, Neilson said.

The solar-panel maker listed about $854.1 million in assets
and about $867.1 million in debt in court papers filed Oct. 31.